New water rate structure meets state water goals by incentivizing efficiency

SACRAMENTO (November 8, 2012) –Thousands of California households could save on their monthly bills thanks to a new rate structure that California American Water Company will introduce in Sonoma, Ventura, Los Angeles and San Diego counties as part of a water rate settlement with the Natural Resources Defense Council approved today by state regulators.

“Water in California is a precious resource and should be treated that way,” said Ed Osann, senior policy analyst with NRDC. “California American Water Company’s new rate structure rewards customers who are smart about their water use, and incentivizes heavy users to make their water habits more efficient. This four-tier rate structure is a good model for helping California meet state water efficiency goals and we encourage other water utilities around the state to consider adopting similar structures.”

The new tiered water user payment structure encourages customers to fix leaks, install water-efficient appliances, and avoid over-irrigating their lawns in order to save on their monthly water bills. Under the new structure, customers will pay less for using less water, as opposed to previous rate structures that applied the same rate to high and low levels of water use.

“California American Water is proud of the agreement we reached on rate design with NRDC and other parties in our 2012 general rate case,” Rob MacLean, president of CalAm. “The structure maintains affordable water service for routine indoor water uses while encouraging efficiency for those who use more water. I’m pleased that NRDC and California American Water were able to partner on creating this common sense rate design.”

In 2010, the California-American Water Company, one of the largest investor-owned water companies in the state, requested permission from the California Public Utilities Commission to increase rates for water service. NRDC intervened in the case to ensure that the final rate designs promoted the state goals of a 20 percent reduction in per capita water use by 2020. The new rate designs approved today were also supported by the state’s consumer advocate office. Still pending before the Commission is a proposal by NRDC to increase the monthly billing credit available to CalAm’s low income customers.

The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 1.4 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.